ERISA-A Reminder About Who Can Sue

In Malkani v. Clark Consulting, Incorporated, No. 10-2008 (4th Cir. 2011) (Unpublished Opinion), the Fourth Circuit Court of Appeals reminds us about who can sue under ERISA. In this case, Plaintiffs Roma P. Malkani (“Malkani”) and Information Systems and Networks Corporation (“ISN”) had brought an action against Clark Consulting, Inc., Stratford Advisory Group, Inc., and Clark & Wamberg, LLC (together, the “Clark Group”), the administrators, for an alleged breach of their fiduciary duties to ISN’s Employees’ Pension Plan (“Plan”) under ERISA. Specifically, Malkani and ISN brought their claims under ERISA section 502(a)(2). The district court granted the Clark Group’s motion to dismiss, and the Plaintiffs appealed.

In this case, the district court based its ruling on its findings that:

–Malkani lacked standing to sue the Clark Group under ERISA, because she failed to show an injury in fact, as required for standing under Article III of the Constitution and the U.S. Supreme Court.

–ISN lacked jurisdiction to sue under section 502(a)(2) of ERISA, as it was Plan sponsor — not a fiduciary of the Plan. An employer, such as ISN, has standing under section 502(a)(2) only if it is a fiduciary under ERISA and is asserting a claim in its fiduciary capacity.

The Fourth Circuit Court of Appeals agreed with the district court’s findings, and affirmed the district court’s decision.

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